ECB Set to Hike Rates Again Amid Soaring Energy Costs

The European Central Bank (ECB) is set to raise interest rates for the second time this year on Thursday, increasing the deposit rate from 2.25% to 2.50%. The decision comes as inflation in the eurozone has surpassed 3%, driven primarily by rising energy prices.

Rising oil and gas costs have pushed Brent crude above $100 a barrel, while natural gas prices have also increased. This escalation of the conflict in the Middle East is expected to keep inflation elevated for longer.

The ECB's decision will be closely watched for signals on further rate hikes in the coming months. However, despite higher borrowing costs and rising bond yields weighing on economic activity, the eurozone economy has proven more resilient than anticipated.